World Agricultural Supply and Demand Estimates - November 2009

According to the latest World Agricultural Supply and Demand Estimates from the USDA's World Agricultural Outlook Board (WOAB), red meat and poultry exports forecasts for 2009 and 2010 have been raised.

Livestock, Poultry and Dairy

Total US meat production for 2009 is raised as fourth-quarter pork and beef production is forecast higher on larger-than-expected October output. Broiler production is raised due to higher-than-expected third-quarter production; forecast fourth-quarter production is unchanged from last month. Turkey production is decreased on weaker third-quarter production, and forecast lower fourth-quarter slaughter. Egg production is little changed.

Meat production for 2010 is lowered from last month as higher forecast beef production due to larger feedlot placements in 2009 is more than offset by lower forecasts for broilers and turkey. Broiler and turkey hatchery data points to a smaller than previously forecast expansion in 2010.

Red meat and poultry export forecasts for 2009 and 2010 are raised. Beef exports are forecast higher for the last half of 2009 and for 2010 on a weak dollar outlook, and improved economic outlook next year. Poultry exports are raised for third-quarter 2009. Import forecasts for beef for both 2009 and 2010 are reduced reflecting lower expected beef supplies in Oceania.

Cattle price forecasts are unchanged for 2009 and 2010. The hog price forecast is raised for fourth quarter 2009, but is unchanged for 2010. Broiler prices are lowered for 2009 and 2010. The egg price forecast is increased slightly for 2009 as fourth-quarter prices have been higher than expected but the forecast is unchanged for 2010.

The milk production forecasts are raised for 2009 and 2010 as milk per cow is forecast higher and the rate of decline in cow inventories is slowed. Improved milk prices are expected to more than outweigh higher feed costs and slow the pace of liquidation. Improving global demand and concerns about world supplies of dairy products have pushed international dairy prices higher and are expected to result in higher US dairy exports during the remainder of this year and into 2010. Import forecasts are lowered for 2009. Fat-basis ending stocks are forecast higher for 2009, but 2010 stocks are forecast lower on both a fat and skim-solids basis as supplies tighten. Improving domestic and export demand and lower year-to-year milk production is expected to lead to higher prices for US cheese, butter, nonfat dry milk, and whey. Class III and IV price forecasts for 2009 and 2010 are raised from last month. The all milk price is forecast at $12.60 to $12.70 per cwt for 2009 and $16.05 to $16.95 for 2010.

Wheat

US wheat supplies for 2009/10 are reduced 4 million bushels this month with small downward revisions to hard red spring wheat and durum production. Exports are projected 25 million bushels lower based on the slow pace of export sales and shipments and increased competition from major Black Sea exporters. US ending stocks for 2009/10 are projected 21 million bushels higher. Ending stocks would be a 10-year high at the projected 885 million bushels. The projected marketing-year average farm price range is narrowed 10 cents on both ends of the range to $4.65 to $5.05 per bushel. Recent gains in futures prices have supported farm gate prices while limiting export opportunities for US wheat.

Global wheat supplies for 2009/10 are projected 1.7 million tons higher as increased production more than offsets a reduction in beginning stocks. Foreign production is raised 3.9 million tons with most of the increase in FSU-12 as an extended growing season and favorable harvest weather boosted yields. Production is raised 2.0 million tons each for Kazakhstan and Russia as harvest results indicate higher yields for spring wheat. Ukraine production is raised 0.5 million tons reflecting late season revisions to winter wheat yields. Production is raised 0.8 million tons for Syria as increased use of irrigation raised yields. Chile production is also raised 0.3 million tons on higher reported area. Production is lowered 1.1 million tons for EU-27 with reductions for France, the United Kingdom, Italy, and Spain more than offsetting small increases elsewhere. Production is also lowered 0.5 million tons for Canada as above normal precipitation and below normal temperatures during October delayed harvesting and raised the potential for field losses, particularly in northern Saskatchewan.

Global wheat trade for 2009/10 is projected higher this month. Imports are raised for EU-27, Israel, South Korea, Syria, Turkey, Bangladesh, and China more than offsetting reductions for Chile and Angola. Higher exports for Russia, up 1.5 million tons, and Kazakhstan and Ukraine, each up 0.5 million tons, are partly offset by reductions for EU-27 and Canada, down 1.0 and 0.5 million tons, respectively. Abundant supplies of low-priced Black Sea wheat are expected to limit export opportunities for the traditional exporting countries including Canada, EU-27, and the United States. Global consumption is raised with increased wheat feeding expected in Russia, Israel, South Korea, and Morocco. Global ending stocks are projected 1.5 million tons higher as the increase in world output more than offsets lower carryin and the relatively small increase in consumption.

Coarse Grains

US feed grain supplies for 2009/10 are projected lower this month reflecting lower forecast corn production. Corn production is forecast 97 million bushels lower with a 1.3-bushel-per-acre reduction in the forecast yield. US corn exports are projected 50 million bushels lower reflecting the slow pace of sales and shipments in recent weeks and prospects for increased competition from larger Black Sea corn and wheat supplies. US corn ending stocks are projected down 47 million bushels. The 2009/10 marketing-year average farm price projection is raised 20 cents on each end of the range to $3.25 to $3.85 per bushel. Barley ending stocks are raised 5 million bushels mostly reflecting a drop in projected exports based on the slow pace of sales and shipments to date. Reflecting the higher expected corn price, marketing-year average farm prices are projected higher for sorghum, barley, and oats.

Global coarse grain supplies for 2009/10 are projected 2.0 million tons lower, as reduced corn beginning stocks and production are only partly offset by higher EU-27 mixed grain, barley, and oat production, and higher Kazakhstan barley production. Global corn beginning stocks for 2009/10 are lowered 0.9 million tons mostly reflecting higher 2008/09 feed use for EU-27 and higher food, seed, and industrial use for South Africa. Global corn production for 2009/10 is lowered 2.8 million tons with reduced production for the United States, Brazil, EU-27, Russia, Venezuela, and Canada only partly offset by increases for South Africa and Ukraine. Brazil production is reduced 1.0 million tons on lower expected area. Production is lowered 0.4 million tons for EU-27 and 0.3 million tons each for Russia and Venezuela. Production is raised 1.0 million tons for South Africa as producer intentions indicate higher planted area and abundant early season rains support timely planting. Ukraine production is raised 1.0 million tons on higher reported yields.

World coarse grain trade is projected slightly lower for 2009/10 mostly reflecting reduced prospects for US corn and barley exports. Barley exports are also reduced for the EU-27, down 0.2 million tons. Partly offsetting is a 1.0-million-ton increase in Ukraine corn exports. Corn imports are lowered 0.3 million tons for Israel with higher expected wheat feeding. Barley imports are lowered 0.2 million tons for Jordan with lower expected feeding. Global coarse grain ending stocks are lower this month with a 3.8-million-ton reduction in world corn stocks. Much of the decrease is based on this month’s US changes, however, other major reductions in 2009/10 corn ending stocks are projected for EU-27, down 1.7 million tons, and Brazil, down 0.8 million tons. Barley ending stocks are projected higher for EU-27 and Kazakhstan, up 1.1 million tons and 0.4 million tons, respectively.

Rice

US rice production in 2009/10 is forecast at 218.2 million cwt, 2.4 million below last month due to a decrease in yield. Average yield is estimated at 7,038 pounds per acre, down 77 pounds from last month. Harvested area is unchanged at 3.10 million acres. Long-grain rice production is lowered 1.7 million cwt to 152.5 million, while combined medium- and short-grain production is down 0.7 million to 65.7 million. Imports, domestic and residual use, and exports are unchanged from a month ago. Ending stocks are projected at 44.2 million cwt, down 2.4 million from last month and the largest stocks since 1986/87.

The all rice season-average farm price is forecast at $13.85 to $14.85 per cwt, up $0.85 per cwt on both ends of the range. The long-grain season-average farm price range is projected at $12.50 to $13.50 per cwt, up $0.75 per cwt on each end of the range. The combined medium- and short-grain farm price range is projected at $18.00 to $19.00 per cwt, up $0.50 per cwt on each end. The increase in prices is based on monthly farm prices reported by the National Agricultural Statistics Service (NASS) through mid-October and a number of other factors including the expectation that world prices will continue to be supported by increased trade prospects in India and the Philippines. A smaller US crop will also be supportive. Additionally, the higher prices are supported in part by the prospects for lower production in South America, principally in Brazil and Uruguay. Continuing Egyptian export restrictions are also contributing to higher prices, particularly for medium-grain rice. The weakening dollar is also contributing to higher commodity prices.

Global 2009/10 rice production and consumption are lowered from a month ago, while imports are raised. World production is forecast at 432.1 million tons, down 1.6 million from last month due mainly to decreases for Brazil, India, the Philippines, and the United States. India’s 2009/10 crop is projected at 83.0 million tons, down 1.0 million from last month and the smallest crop since 1997/98. Global consumption is lowered from a month ago due mainly to decreases for India and the Philippines. The 2009/10 import projection is raised 860,000 tons, mainly due to larger imports for Afghanistan, Brazil, India, and the Philippines. Global ending stocks for 2009/10 are projected at 85.9 million tons, nearly the same as last month, but a decrease of 4.8 million from the 2008/09 estimate.

Oilseeds

US oilseed ending stocks for 2009/10 are projected at 8.8 million tons, up 1.1 million from last month as larger supplies are only partly offset by increased exports. Oilseed crush is almost unchanged as a small increase for soybeans is offset by a reduction for cottonseed. Total US oilseed production is projected at 97.8 million tons, up 1.7 million from last month due to higher soybean production. Soybean production is forecast at a record 3.319 billion bushels, up 69 million from last month. The soybean yield is projected at a record 43.3 bushels per acre, up 0.9 bushels from the previous estimate. Soybean exports are raised 20 million bushels to 1.325 billion due to increased supplies and increased global import demand, mainly for China, EU-27, and Russia. Soybean ending stocks are projected at 270 million bushels, up 40 million from last month.

Prices for soybeans and products are projected higher for 2009/10, reflecting higher corn and soybean futures prices. The US season-average soybean price range is projected at $8.20 to $10.20 per bushel, up 20 cents on both ends of the range. The soybean meal price is projected at $250 to $310 per short ton, up 5 dollars on both ends of the range. The soybean oil price range is projected at 33 to 37 cents per pound, up 1 cent on both ends of the range.

Global oilseed production for 2009/10 is projected at 428.9 million tons, up 3.6 million from last month. Increased soybean and rapeseed production are only partly offset by lower sunflowerseed, cottonseed, and peanut production. Global soybean production is projected higher with increases for the United States, Brazil, Argentina, Paraguay, and Uruguay. Brazil soybean production is projected at a record 63 million tons, up 1 million from last month due to an expected increased harvested area. Argentina soybean production is raised 0.5 million tons to 53 million due to increased area as producers shift additional area to soybeans from sunflowerseed. Argentina sunflowerseed production is reduced due to lower planted area resulting from dry conditions during the planting season. Global rapeseed production is projected higher as increased production for EU-27 is only partly offset by a reduction for Canada. Other changes include higher sunflowerseed production for Ukraine and EU-27, and lower cottonseed production for China.

Global oilseed stocks for 2009/10 are raised 3.1 million tons to 69.0 million. Increased soybean stocks for Brazil, the United States, and China account for most of the change. Rapeseed stocks for Canada, EU-27, and India are also increased. China soybean imports are raised for 2008/09 and 2009/10 to 41.1 million and 40.5 million tons, respectively. Soybean exports for 2009/10 are raised for Brazil and Argentina. Global vegetable oil stocks are projected 1 million tons higher due to increases in soybean oil stocks for Brazil, China, and India, and increased palm oil stocks for China and Malaysia.

Sugar

Special note: Historically, the Sweetener Market Data (SMD) published by the Farm Service Agency (FSA) contains Amiscellaneous@ use, including values for intra-industry sales less receipts, refining losses, and residual inventory adjustments reported by sugarbeet and sugarcane processors and cane sugar refiners. The September 2009 SMD explains a new method of estimating imported refined sugar in an effort to reduce an increasingly large negative SMD miscellaneous use. FSA will apply the new method to SMD data beginning with 2009/10. In order to maintain consistency across years, the AFood@ and AMiscellaneous@ categories for US sugar use in the WASDE report are combined for 2007/08, 2008/09, and 2009/10.

Projected 2009/10 US sugar supply is increased 180,000 tons, raw value, from last month. Lower production is more than offset by higher beginning stocks and higher imports from Mexico. Beet sugar production is reduced 300,000 tons based on lower forecast sugarbeet production and lower projected sugar recovery. Cane sugar production is lowered 12,000 tons based on processor reports of lower harvest area in Hawaii and forecast lower sugarcane production in Texas. Despite higher forecast sugarcane yields in Louisiana, sugar production is unchanged due to excessive rains during harvest, reducing anticipated sugar recovery. Sugar use is unchanged.

Ending stocks for 2008/09 are increased 227,000 tons from last month=s estimate, according to final SMD data. With a small reduction in final total supply, total use is reduced 251,000 tons, reflecting mostly lower combined food and miscellaneous uses.

For Mexico, 2009/10 domestic sugar use is lowered 240,000 metric tons, raw value, while exports are raised by the same amount. The lower use of sugar in Mexico results from updated analysis of macroeconomic factors affecting per capita sweetener use.

Cotton

This month’s US cotton estimates for 2009/10 show lower production, lower ending stocks, and higher prices. The crop production forecast is reduced 502, 000 bales from last month, with the largest reductions in Arkansas, Missouri, and Texas. Domestic mill use is unchanged. Exports also are unchanged, despite the lower supply, due to lower production and stronger demand outside the United States. The forecast range for the average price received by producers of 52 to 60 cents per pound is raised 3 cents on each end of the range.

The world 2009/10 cotton forecasts include a 4.3-per cent decrease in ending stocks from last month, which results from a combination of lower beginning stocks, lower production, and higher consumption. Imports and consumption for Bangladesh are raised beginning in 2003/04 based on analysis of new information sources, which indicate that both are sharply higher than previously estimated (see http://www.fas.usda.gov/currwmt.asp for details). Increases in prior years’ exports, mostly among Bangladesh’s trading partners, reduce beginning stocks for 2009/10. World production in 2009/10 is lowered by just over 1.0 million bales, including reductions for China and the United States, partially offset by increases for Pakistan and Uzbekistan. World consumption is raised about 900,000 bales, as the increase for Bangladesh is partially offset by a decrease for Russia. World trade is raised nearly 4 per cent, due mainly to higher import demand by Bangladesh and China. Exports are raised for India, Uzbekistan, Brazil, and others. World ending stocks are now forecast at 53.7 million bales, down 13 per cent from the beginning level.

Approved by the Secretary of Agriculture and the Chairperson of the World Agricultural Outlook Board, Gerald A. Bange, (202) 720-6030. This report was prepared by the Interagency Commodity Estimates Committees.

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